Germany's Kreditech secures $120M from PayU for India foray

Alternative lending startup Kreditech has been focused on European markets and is present in Netherlands, Poland, Spain, as well as Russia.Mugdha Variyar | ET Bureau | Updated: May 12, 2017, 01:13 IST

PayU, the Naspers-owned global payments company, has invested $120 million in German alternative lending startup Kreditech, and the deal will see the Peter Thiel and IFC-backed startup entering India and working with PayU India on launching its credit product in the country.

Kreditech gives long-duration, large-ticket loans to consumers with lower purchasing power and uses its own technology to underwrite loans. It was launched in 2012 and has so far raised funding from JC Flowers, Peter Thiel, Rakuten and the World Bank's IFC. The PayU investment is an extension of the company's Series-C round.

The startup has been focused on European markets and is present in Netherlands, Poland, Spain, as well as Russia.

With this investment, the company will further focus on international expansion starting with India, Alexander Graubner-Müller, CEO of Kreditech, told ET.

Kreditech has earlier worked with PayU in Poland, where it developed point-of-sale products and online cardless EMI products.

“We are looking to introduce the product in India in the next few months together with PayU,“ Müller told ET. “The idea is to help people with lower purchasing power with larger ticket expenses, such as long-distance flights.“

Kreditech is setting up infrastructure in India, Müller said, while PayU will leverage its technology, taking it to its customer and merchant base. Kreditech said it will expand its lending-as-a-Service (LaaS) offering and deliver its unique AI and machine-learning credit underwriting and loan management technology to PayU's 300,000-strong network of merchants.

“This allows us to bring Kreditech on the PayU platform and offer it our merchants as well as consumers. We are also open to taking Kreditech to big ecommerce players in India to increase throughput on their platforms,“ PayU India CEO Amrish Rau said.